MOSCOW, April 22, Nadezhda Sarapina. The International Monetary Fund has once again raised its growth forecast for the Russian economy to 3.2% of GDP in 2024, recognizing the current indicators as “pretty good.” Some domestic experts are not so optimistic. About the assessments and arguments given by different experts, see the material .
World indicators
According to the April IMF report, the world economy will not accelerate in the next couple of years, maintaining overall dynamics of last year. The main limiting factors are high key rates, the long-term consequences of the pandemic, as well as the conflict in Ukraine.
In developed countries, on average, they expect plus 1.7% of GDP in 2024 (0.1 more than in 2023) and 1.8 in 2025. In developing countries — 4.2% (minus 0.1 by 2023) for both years.
In the euro area — 0.8 and 1.5%, in Canada — 1.2 and 2.3%. The leaders are Spain (plus 2.1% in 2024), France (1.4%). Germany will finally be in the black (0.2). However, in January the IMF gave higher estimates.
In the countries of the Middle East and Africa — 4.2% and 4%. Russia — 3.2.
China will slow down: 4.6 (in 2024) and 4.1% (in 2025). This would slow global trade growth by 0.3%.
Global inflation will decrease from 6.8 to 5.9% in 2024 and to 4.5% in 2025, which in the future will allow easing monetary policy (monetary policy). Business will breathe more freely, the economy will receive additional incentives. The IMF believes that in this case developed countries will return to target indicators faster than developing ones.
Russian market
The forecast for Russia was improved for the second time in a row. The IMF's chief economist and director of research, Pierre-Olivier Gourincha, noted that the results were «pretty good.» His deputy Petya Koeva-Brooks attributes this to the high level of private consumption and large government spending.
Oleg Kalmanovich, chief analyst at the brokerage company Neomarkets, adds: a significant contribution is made by the defense industry, as well as enterprises producing import-substituting products.
A number of experts call the IMF's calculations too conservative. Thus, General Director of Alfa-Forex Guzel Protsenko points out: “They underestimate one of the main importers of Russian raw materials — China and, oddly enough, the USA, where the recession promised a year ago never happened.”
Economist and communications director at BitRiver Andrei Loboda believes that the IMF had to make allowances for the Russian economy’s resilience to external shocks and increased investor confidence, hence the increase. However, expectations may not be met due to risks such as geopolitical instability and volatility in global markets.
In his opinion, GDP is capable of increasing by four to eight percent per year, and even more if monetary policy is softened. “Increasing investment in small and medium-sized businesses, expanding lending to the real sector of the economy and the development of industrial mining will greatly stimulate the economy,” he explains.
Other forecasts
In At the same time, the Bank of Russia is less optimistic: one or two percent in 2024 and 1.5-2.5 in 2025. Production capabilities do not correspond to domestic demand, hence inflation and economic slowdown. The Central Bank restrains prices with a high key rate.
Kalmanovich clarifies: the impact of these factors on GDP is not so obvious. High interest rates and inflation lead to limited consumption, and production is not expanded due to high borrowing costs.
The Bank of Russia points primarily to a shortage of personnel. “Running indicators, including business surveys, suggest that labor market rigidity remains high, although it has plateaued in some industries,” the report said. However, the population's interest in savings is also increasing. This, coupled with lower demand for imports, contributes to economic recovery.
The Ministry of Economic Development predicts a steady increase in GDP by 2.3%. Inflation should reach 4.5% in 2024. “This is possible, but it’s more likely cost inflation. Consumer demand is growing, but there are no jumps in individual goods now, mainly due to expensive production,” comments Protsenko. In the meantime, prices are gradually slowing down. Therefore, a new increase in the key rate is unlikely.
Rising oil prices also improve economic indicators, and as inflation expectations decline, the key rate will return to normal, which will ultimately accelerate GDP growth.